Need help with your options portfolio: Introducing OptionsPlay, a stock and options analysis suite. November 4, 2017

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1 Need help with your options portfolio: Introducing OptionsPlay, a stock and options analysis suite November 4, 2017

2 Limitation of liability The opinions expressed in this presentation are those of the author(s) and presenter(s) only and do not necessarily represent the views of of the Bourse de Montréal Inc. (the Bourse ) and/or its affiliates. This document is offered for general information purposes only. The information provided in this document, including financial and economic data, quotes and any analysis or interpretation thereof, is provided solely for information purposes and shall not be construed in any jurisdiction as providing any advice or recommendation with respect to the purchase or sale of any derivative instrument, underlying security or any other financial instrument or as providing legal, accounting, tax, financial or investment advice. The Bourse recommends that you consult your own advisors in accordance with your needs. All references in this document to specifications, rules and obligations concerning a product are subject to the rules, policies and procedures of the Bourse and its clearinghouse, the Canadian Derivatives Clearing Corporation, which prevail over this document. Although care has been taken in the preparation of this document, the Bourse and/or its affiliates do not guarantee the accuracy or completeness of the information contained in this document and reserve the right to amend or review the content of this document any time and without prior notice. Neither the Bourse, nor any of its affiliates, directors, officers, employees or agents shall be liable for any damages, losses or costs incurred as a result of any errors or omissions in this document or of the use of or reliance upon any information appearing in this document.

3 Overview Covered Call Basics & Benefits Individual Preferences OptionsPlay Back-testing Results Automate Covered Calls w/ OptionsPlay Exit Strategy 2

4 Basics & Benefits Covered Call Benefits: Generates consistent income Lowers volatility & net cost basis Used on stocks in your current portfolio Limitations: Limits the upside return of stock Requires minimum of 100 shares Risk of losing your stock 3

5 Find your Individual Preferences One size does NOT fit all! Time Frame Short Term Medium Term Long Term Expiration Date <1 Month-2 months 2-3 Months 3-6 Months Risk Tolerance Strike Price Conservative 90% POW (.10 Delta) Optimal 80% POW (.20 Delta) Aggressive 70% POW (.30 Delta) 4

6 Back-test Results : Expiration Date Short Medium Long Days Days Days Less Premium More Premium More Certainty Less Certainty 5

7 OptionsPlay Back-test Results : Expiration Date Short Medium Long Days Days Days Less Premium More Premium More Certainty Less Certainty Earnings is Key! 1 Month 4 out of 12 = 25% 3 Month 4 out of 4 = 100% 6

8 OptionsPlay Back-test Results : Strike Price 10 Delta 20 Delta 30 Delta Conservative Optimal Aggressive Less Premium More Premium More Upside Less Upside 7

9 OptionsPlay Back-test Results : Strike Price 10 Delta 20 Delta 30 Delta Conservative Optimal Aggressive Less Premium More Premium More Upside Less Upside Upside is more important than fat premiums! 8

10 OptionsPlay Back-test Results : Performance Optimal Certainty > Premium Upside Return > Income Expiration: Days (Short Term) Strike: 15 Delta (Optimal-Conservative) OptionsPlay Performance 6.70% Annualized Return 9

11 Consistent Income Returns What Expiration & Strike should I choose? Select an expiration date that suits your trading frequency Select a strike price based on your risk-tolerance Dividend Yield as your Guide 10

12 Automate your Income Strategy Income opportunities on stocks you already own w/ OptionsPlay! 11

13 Exit Strategy 3 Stock Scenarios and What to Do Higher = Hold & Roll only in last week. Sideways = Hold Position until expiry. Lower = Roll down your position early. 12

14 Options Education Day Offer Free Access to OptionsPlay Canada Exclusive Offer for US Listed Options Free 30 Day Trial 20% Discount Draw: 1 Year OptionsPlay Subscription ($500) 13

15 2017 Bourse de Montréal Inc. All rights reserved. BAX, OBX, ONX, OIS-MX, CGZ, CGF, CGB, LGB, OGB, SXO, SXF, SXM, SCF, SXA, SXB, SXH, SXY, and USX are registered trademarks of the Bourse. OBW, OBY, OBZ, SXK, SXU, SXJ, SXV, Montréal Exchange and the Montréal Exchange logo are trademarks of the Bourse. TMX and TMX Group are registered trademarks of TSX Inc. The S&P/TSX 60 Index, S&P/TSX Composite Index, S&P/TSX Global Gold Index, S&P/TSX Capped Financials Index, S&P/TSX Capped Information Technology Index, S&P/TSX Capped Energy Index, S&P/TSX Composite Index Banks (Industry Group), S&P/TSX Capped Utilities Index (collectively, the Indices ) are products of S&P Dow Jones Indices LLC ( SPDJI ) and TSX Inc. ( TSX ). Standard & Poor s and S&P are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ); and TSX is a registered trademark of TSX. SPDJI, Dow Jones, S&P and TSX do not sponsor, endorse, sell or promote any products based on the Indices and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the Indices or any data related thereto.

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